IBM executive says blockchain ‘creates a lot of value’ for manufacturers, retailers

Blockchain, a digital record-keeping method that exploded in popularity in conjunction with the cryptocurrency craze, will change the way the world makes transactions, IBM’sMartin Schroeter told CNBC on Thursday after earnings.

“If you bought IBM stock today, you would have to wait three days for that to clear because it has to go through its process,” Schroeter, IBM’s senior vice president of global markets, told “Mad Money” host Jim Cramer. “In a blockchain, … you can see every transaction instantly, so your trade could clear and go from their account to your account instantly.”

But blockchain isn’t all about trading, and certainly not all about trading cryptocurrencies, Schroeter, former CFO of IBM, told Cramer. (Schroeter took on his new role, once held by IBM CEO Ginni Rometty, on Jan. 11, ceding the CFO role to IBM veteran James Kavanaugh.)

Having recently partnered with shipping colossus Maersk on a joint venture to apply blockchain software, IBM hopes to establish an efficient “global trade network” of manufacturers, shippers, freight forwarders and others, Schroeter said.

The idea is to streamline the $2 trillion global trade market, making its numerous logistical undertakings faster, easier and more comprehensible, he told Cramer.

“There’s no more paperwork and you know that it’s going to be cleared at a specific time,” Schroeter said, using shipments as an example. “Everyone has perfect visibility to where everything is. You’ve just shortened that cycle dramatically. That creates a lot of value, a lot of value for manufacturers and retailers.”

When it comes to enterprises — IBM’s main customer base — Schroeter said they look for three key applications of blockchain.

“One, they have to know that it’s a permissioned network,” Schroeter said. “So, permissioned network means I know who else is in with me. Bitcoin is not permissioned. Anybody could have a bitcoin. But if I’m Maersk, … I need to know who the manufacturers [are] and I need to trust and only let people in that I want in my network.” […]

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